The remarkable momentum gathered by Tahoe – Truckee real estate through 2020 carried over into a record-setting first half of 2021. The opening six months of any given year are typically quieter than the latter, yet this year 875 residential properties have transacted year-to-date exceeding the same period a year prior by 36%. More notably, price escalation and an increasingly premium buyer profile have driven the cumulative dollar volume of these transactions above $1 billion; the first time this threshold has ever been met in the first half of any year.
The local marketplace is as competitive as at any point in time with multiple bids having become commonplace. While the total number of listings brought to market this year is nearly identical to 2020, available supply feels impossibly tight having hovered around a single month of supply for much of the last year. Median time on market is an implausibly low 10 days year-to-date while the average sale is transacting at 104% of asking price. Buyer mentality continues to focus around “what will it take” rather than “what is it worth” understanding that real value is in the opportunity to gain the non-monetary benefits of owning property in this pristine mountain setting.
As we look toward a new normal, a hybrid ‘co-primary’ home concept is emerging. The opportunity to untether from a traditional Monday – Friday office model is allowing for a deeper engagement in the local community in a way that traditional vacation homeownership never allowed for.
The current velocity of the real estate market will ultimately prove unsustainable, but few signs of erosion are present. Today’s consumer is well calibrated to the realities; including a keen awareness of buying into a peaking market. Unlike the bubble years preceding the last recession, there is not rampant speculation over future values, nor does there appear to be great sensitivity to the threat of rising interest rates.
Rather, these consumers understand the quality-of-life benefit to living in the mountains and recognize that by waiting out a hot market, they are losing time spent in enjoyment.
The second half of any given year typically delivers double the transaction volume as summer shoppers merge with those buying in anticipation of winter. From the current vantage, only constrained supply will prevent this trend from continuing.